Action: US President Donald Trump is preparing to impose tariffs of more than $50bn on Chinese goods following an investigation under the US Trade Act. The US says China has systematically stolen American intellectual property. Picture: REUTERS
Action: US President Donald Trump is preparing to impose tariffs of more than $50bn on Chinese goods following an investigation under the US Trade Act. The US says China has systematically stolen American intellectual property. Picture: REUTERS

Beijing — China has increased tariffs up to 25% on 128 US products, from frozen pork and wine to certain fruits and nuts, escalating a dispute between the world’s biggest economies in response to US duties on imports of aluminium and steel.

The tariffs, to take effect on Monday, were announced late on Sunday by China’s finance ministry and matched a list of possible tariffs on up to $3bn in US goods published by China on March 23.

Soon after the announcement, an editorial in the widely read Global Times newspaper warned that if the US had thought China would not retaliate or would only take symbolic countermeasures, it could "say goodbye to that delusion".

The Global Times is run by the ruling Communist Party’s official People’s Daily, although its stance does not necessarily reflect government policy.

"Even though China and the US have not publicly said they are in a trade war, the sparks of such a war have already started to fly," the newspaper said.

The ministry of commerce said it was suspending its obligations to the World Trade Organisation (WTO) to reduce tariffs on 120 US goods, including fruit and ethanol. The tariffs on those products will be raised an extra 15%. Eight other products, including pork and scrap aluminium, would now be subject to additional tariffs of 25%, it said, with the measures effective from April 2.

"China’s suspension of its tariff concessions is a legitimate action adopted under WTO rules to safeguard China’s interests," the finance ministry said.

China is moving swiftly with retaliatory action amid escalating trade tension with the US that has rocked global financial markets in the past week as investors fear a full-blown trade dispute between them will damage world growth.

US President Donald Trump is also preparing to impose tariffs of more than $50bn on Chinese goods following an investigation under section 301 of the 1974 US Trade Act. The US administration says that China has systematically misappropriated American intellectual property, allegations that China denies.

About the section 301 investigation, China had "yet to unsheathe its sword", the official Xinhua news agency said.

The Trump administration is expected to unveil this week a list of Chinese goods that could be subjected to new US tariffs.

US technology industry officials said they expected the list to target products that benefit from Beijing’s Made in China 2025 programme, which aims to upgrade the domestic manufacturing base with more advanced products.

China has repeatedly promised to open its economy further, but many foreign companies complain of unfair treatment. China warned the US on Thursday not to open a Pandora’s box and spark a flurry of protectionist practices across the globe.

"There are some people in the West who think that China looks tough for the sake of a domestic audience, and would easily make concessions," the Global Times said. "But they are wrong," the newspaper said. Reaction to China’s measures varied on social media, with some saying Chinese customers would be the ones to ultimately pay for a trade war.

"Why not directly target soybean and planes? The tariffs that China announced today don’t sound a lot to me," said a user on the Weibo microblog platform. Aircraft and soybeans were China’s biggest US imports by value in 2017.

The commerce ministry said the US had "seriously violated" the principles of nondis- crimination enshrined in WTO rules and damaged China’s interests.

Reuters